It was RESOLVED that the minutes of the
previous meeting on 20 September 2017 be approved as an accurate
record.

5.

Matters Arising

To consider any matters arising from the
minutes of the previous meeting.

Minutes:

(i)
Planning Applications Audit Report

The Chair outlined
that this report had been circulated after the previous meeting of
the Committee.

(ii) I4B
Holdings Ltd – Discussion at the previous meeting

Members felt that
the minutes did not fully reflect the nature of the discussion on
I4B at the previous meeting. It was put forward that there had been
more of a focus than had been recorded on the governance framework
through which the Company should operate, and the different
mechanisms by which I4B would be accountable to the Council.

The Chair stated
that the wording was not in itself inaccurate, and therefore it was
not necessary to suggest amendments, rather that the importance of
the discussion on governance had not been emphasised clearly
enough. It was agreed that it would be suitable for these points to
be reflected on record for the minutes of the current meeting.
Conrad Hall (the Council’s Chief Finance Officer) added that
the Company’s Business Plan for 2018/19 was presently being
drafted and that there would be additional opportunities for
Members to offer their opinions on how the Company’s
governance framework should operate.

The report summarises the auditing activities
undertaken by KPMG in the period September 2017 to December 2017
and provides an overview of actions

to be completed by the next meeting of the
Audit Committee.

Minutes:

Andrew Sayers (Partner, KPMG - External Audit)
introduced the report which provided the Committee with external
audit updates since September 2017 and the work planned before the
next meeting on 10 January 2018.

He drew Members’ attention to the
completion of the work on the Housing Benefit Subsidy claim and
Teachers’ Pension Return which was expected to be certified
by 30 November 2017, and added that a report would be provided on
the detailed findings at the next Audit Advisory Committee meeting.
He also explained that the five objections which related to the
payment made to the Council’s former Human Resources (HR)
Director had not been upheld, and that the decision letters (which
set out the external auditor’s reasons in detail) had been
sent to the objectors individually on the afternoon of the meeting.
He added that although the objections had not been upheld he had
made three recommendations for improvement. He also specified that the outstanding objection
which related to the Lender Option Borrower Option (LOBO) loans
remained in the process of being reviewed.

Members requested clarity on the process for
how the determination letters to objectors were issued by the
external auditor. There were specific questions raised on whether
Audit Advisory Committee Members should have sight of the
auditor’s reasoning for the objections not being upheld, and
to what extent the information would be made available to the
public. Conrad Hall clarified that there were strict legal
restrictions on how the information could be shared. These restrictions flow from the overall legal
framework for managing objections to the accounts, rather than
because of the particular content of these letters. Conrad Hall
added that the restrictions on circulating the letters applied to
anyone in receipt of them, therefore including the objectors, and
that a breach of these restrictions would potentially constitute a
criminal offence. He outlined that information that was already in
the public domain on the issue could of course be shared, and that
this therefore included the fact that the objections had not been
upheld and that recommendations for improvement had been made (as
these facts had been disclosed earlier by Andrew
Sayers). Conrad Hall added that the
Council would consider an additional public response, but would
first need to take careful legal advice which it had not yet been
possible to do as the determination letters had only been received
about three hours before the start of the meeting. Andrew Sayers
added that the objectors themselves had a legal responsibility not
to share the response, and that the potential criminal consequences
of doing so had been made clear to them. A Member of the Committee
placed on record their concern at members of the Audit Advisory
Committee not being able to access the response even if on a
limited or restricted basis.

A question was also raised on whether a final
figure on the External Auditor’s fees had yet been reached.
Andrew Sayers responded that he did not have a figure at the time
of the ...
view the full minutes text for item 6.

The Annual Audit Letter summarises the outcome
from KPMG’s audit work at the London Borough of Brent in
relation to the 2016/17 audit year.

Minutes:

Andrew Sayers continued and gave a brief
overview of the Annual Audit Letter which summarised the outcomes
and key messages that had arisen from KPMG’s 2016/2017 audit
work at the Council. He referred Members to the report within the
agenda pack for further detail on the key information and welcomed
any questions.

The Chair noted that the Council’s
financial resilience was a key focus of the audit work and
questioned whether there were any issues that the Committee should
be aware of, plus whether it was anticipated that the work 2017/18
audit work would be completed by the statutory deadline. Andrew
Sayers responded that the external auditors remained comfortable
that the Authority’s level of reserves had been set at an
appropriate level. He also confirmed that the resources to complete
the audit work in 2017/18 were adequate and it was anticipated that
the work would be completed on schedule. Conrad Hall agreed that
the initial preparatory work for 2017/18 had progressed well and
there were no expected issues in order to meet the new deadline for
the draft annual accounts of 31 May 2018 (previously 30 June) and
of 31 July 2018 (previously 30 September) for the audited
accounts.

The Chair placed on record the
Committee’s thanks and appreciation to both the
Council’s external auditors and Finance Department for their
ongoing work.

The paper provides an update on the progress
of the BHP / Housing Management Transformation. This is to assist
the committee in taking on the functions that were carried out by
BHP‘s Audit Committee by providing them with background to
key current issues in housing management.

Minutes:

Troy Francis (the Council’s Head of
Housing Management Customer Services) provided the Committee with
an update on the transformation of the Housing Management function
provided to the Council’s Tenants and Leaseholders. He
specified that the report detailed the actions taken since the
management agreement with Brent Housing Partnership (BHP) had been
ended in April 2017 and then brought back under direct control of
the Council in October 2017.

Mr Francis explained that the Housing
Management Transformation Board, which consisted of both Brent
Council and BHP officers, had been formed to oversee four key
objectives on the housing management transformation and delivery of
services (outlined under paragraph 3.2 of the report). Members
heard specific details on: the progress made on recruitment as
several senior managers had now been appointed; and the
incorporation of housing requirements into the Council’s
procurement of a new Customer Relations Management (CRM) system. Mr
Francis stressed that the change within the past year had been
challenging, particularly due gaps in management capacity and
extensive levels of staff turnover. However he specified that the
new operating model was still planned to go live on 1 July 2018
after a wide-ranging consultation with relevant stakeholders.
Conrad Hall added that the report had been produced for the
Council’s Audit Advisory Committee to fulfil the monitoring
role previously fulfilled by BHP’s own Audit Committee.

A Member noted that Brent was not unique in
bringing Arm’s Length Management Organisations (ALMOs) back
under direct Council control and questioned if any comparisons or
benchmarking had been undertaken with Authorities in a similar
position. Troy Francis responded and stated that the Housing
Management Transformation team were aware of the need for strategic
alignment and would seek to draw upon both internal and external
expertise throughout the transition process. Carolyn Downs (the
Council’s Chief Executive) added that BHP had benchmarked
performance in various areas (such as voids and customer
satisfaction) and had continued to do so since housing management
services were brought under the Council’s direct control. She
explained that the performance data was now being recorded more
accurately by the Council and that, although this might mean that
the new statistics appear less positive initially, it would enable
performance to be monitored more efficiently going forward. It was
felt that it was presently too soon to benchmark with similar
Authorities or organisations but this could be assessed in six
months to a year‘s time.

(Councillor Davidson joined the meeting at 7.00pm.)

Questions also arose on whether there would be
any financial risk to the Council if certain properties needed to
be refurbished to a higher standard, and whether any subsequent
budgeting problems might arise from this. Carolyn Downs stated that
financial due diligence had been undertaken before the transfer of
properties and that there did not appear to have been any
wide-ranging financial risks. She noted that issues on fire safety
had obviously needed to be addressed in the wake of the Grenfell
Tower tragedy and that the Council had undertaken fire safety
checks on ...
view the full minutes text for item 8.

The report provides a summary of
internal audit reports issued to the Brent Housing Partnership
Audit Committee during the period from 1 April 2016 to 31 August
2017.

Minutes:

Michael Bradley (the Council’s Head of
Audit and Investigation) introduced the report which provided an
overall summary of the internal audit reports issued to the BHP
Audit Committee from 1 April 2017 to 31 August 2017. He directed
Members’ attention to the table within the report (under
paragraph 3.1) which highlighted that, of the 11 internal audit
reports over this time period, six had provided
‘reasonable’ assurance and five had provided
‘limited’ assurance. He explained that the reports
provided a ‘snapshot’ of the controls in place at
specific times and progress on the recommendations made to address
the audits which had only provided ‘limited’ assurance.
He explained that the Council’s Internal Audit team had
followed up on whether the recommendations to rectify these areas
had been implemented, and the findings were also detailed within
the report.

Members commented that it was clear a lot of
work had been envisaged as part of the recommendations, but that
the implementation appeared to be slow. It was also requested that
a list which provided an update on progress be provided at the
Audit Advisory Committee’s meeting in March 2018.

It was RESOLVED that:

(i) The
report be noted; and

(ii) A further
update report be brought back to the Audit Advisory Committee at
its meeting on 20 March 2018.

The paper informs Members and seeks approval
of the new Anti-Fraud and Bribery Policy. The policy has been
brought up to date to reflect the fraud risks, legislation and
working practices currently applicable in Brent.

Michael Bradley continued and outlined that he
would combine his overview of the new proposed Anti-Fraud and
Bribery Policy 2017 and Anti-Money Laundering Policy 2017.

He began with a brief summary of the new
Anti-Fraud and Bribery Policy 2017, which had last been amended in
2014, and notified Members that the Council would be undertaking a
fraud awareness drive in early 2018. He also explained that the new
Money Laundering Regulations came into statute in June 2017 and the
new proposed Anti-Money Laundering Policy set out the
Council’s response. He noted that the policy had been drawn
to ensure that the Council was compliant and protected itself from
any threat of money laundering.

Members welcomed the proposed policies and
questioned how it was envisaged for the detail to be shared with
stakeholders such as: officers, Members and residents. Michael
Bradley said that the establishment of the policies themselves had
been the starting point and that a publicity and communications
strategy would be developed in due course. Discussions ensued on
the different methods to spread information about the policies,
which included: awareness raising with the Council’s tenants
and leaseholders; fraud awareness workshops; e-learning for Council
staff; information publicised on the Council’s intranet; and
scheduled discussions at resident engagement forums such as Brent
Connects. In response to an additional question about how the
borough’s schools would be made aware of the policies,
Michael Bradley stated that schools would be factored into the
awareness raising programs to assist in managing the specific risks
that schools faced. He said that the mechanisms for safely
reporting fraud and whistleblowing would also be made clear to all
stakeholders.

It was RESOLVED that:

(i) Subject
to all staff job titles being corrected within the corporate
framework section, the Anti-Fraud and Bribery Policy 2017 be noted
and approved;

(ii) The Anti-Money
Laundering Policy 2017 be noted and approved; and

(iii) A publicity and
communications strategy be developed to ensure that officers,
Members and residents were made aware of the new policies and the
provisions within them.

11.

Any Other Urgent Business

Notice of items to be raised under this
heading must be given in writing to the Head of Executive and
Member Services or his representative before the meeting in
accordance with Standing Order 60.

Minutes:

The Chair outlined
that he had received a request for an urgent item from Councillor
Perrin entitled ‘Public Questioning of Brent's Probity in
Planning’ but that he would not be using his discretion as
Chair to add the item to the agenda on this occasion. He explained
although matters raised on proposed amendments to the Planning Code
of Conduct may be relevant at a future meeting, Members would not
have had adequate time consider the issue at the present
meeting.

It was RESOLVED
that a report on the proposals to amend the Planning Code of
Conduct would be present at the meeting of the Audit Advisory
Committee at its meeting on 10 January 2018.

The purpose of this report is
to set out the findings from an investigation into the
circumstances for procuring works to conduct landscaping work at
Paddington Cemetery and the steps being taken to address concerns
about contamination of the site.

Subsequent to this meeting the
investigation report (without appendices) which was restricted has
been published and can be viewed via the following link:

Michael Bradley introduced the report which
set out a summary of the findings from an internal audit
investigation into the procurement of landscaping work at
Paddington Cemetery in 2010. Members heard that the investigation
had been conducted in light of the discovery of asbestos
contamination at the Cemetery. He stated that the review examined
procurement procedures within the Cemeteries service at the time
the work was undertaken in 2010 and had concluded that the
procedures had been inadequate. Members heard that the review had
also set out recommendations for the Council’s senior
management to urgently review procurement processes particularly in
the cemeteries service and consider the best course of remediation
action to proportionately mitigate the soil contamination
identified.

Chris Whyte (the Council’s Operational
Director of Environment Services) emphasised that the Council had
undertaken remediation work to ensure that the issues identified
were solved. He outlined that the deficiencies in the
Council’s procurement processes would be addressed and that a
specialist excavation investigation of the site had found that the
contamination was very low risk and could be properly contained. He
re-iterated that the Council sought to offer a clear assurance that
the site was safe and that the Council remained focused on the
issues being rectified moving forward.

As a result of the discussion on the report
moving to focus on information classified as exempt, it was agreed
that the remainder of the meeting should be conducted in a closed
session.

13.

Exclusion of Press and Public

The following items are not for
publication as they relate to the following category of exempt
information as specified under Section 100A(4) of the Local
Government Act 1972, namely:

3. Information relating to the financial
or business affairs of any particular person (including the
authority holding that information).

Minutes:

It was RESOLVED that the press and
public be excluded until the end of the
meeting as the remainder of the discussion on the Paddington
Cemetery Groundwork item contained exempt information, as defined
under paragraph 3 of Part 1, Schedule 12A of the Local Government
Act 1972.

14.

Paddington Cemetery Groundwork (continued)

Minutes:

The Chair invited Councillor Duffy to speak on
the Paddington Cemetery Groundworks report. Councillor Duffy
addressed the Committee and further discussion followed on the
points raised. The Committee were reminded by the chief finance
officer of the independence of the internal audit service The Chair
stated that the key was assurance for both the Committee and
residents about the site moving forward and ensuring that the
issues identified within the report had been fully addressed.

It was RESOLVED that:

(i) The
report, its findings and remediation actions taken by the Council
be noted;

(ii) Councillor
Duffy and Michael Bradley would meet to discuss information about
the investigation; and

(iii) Subject to the
general obligations contained within Paragraph Six of the Members
Code of Conduct being upheld, Councillor Duffy be authorised to
take away a hard copy of the restricted report.